MAS Responds to Public Criticism of Cheque Phase-Out Plan - Fintech Singapore

MAS Responds to Public Criticism of Cheque Phase-Out Plan – Fintech Singapore

Time Stamp: August 21, 2023 10:15 PM
Source Node: 2848152

The Monetary Authority of Singapore (MAS) has acknowledged that some businesses and customers may have difficulties and challenges in moving away from cheque usage.

MAS explained that while banks had generally not charged customers for to process cheques, that is no longer tenable with the rising cost of cheque clearing on the back of a sharp decline in the volume of cheques in recent years.

This was in response to two letters from Paul Chan Poh Hoi and Hariharan Gangadharan who have raised concerns about the fee to process cheques.

The regulator had announced that all corporate cheques will be phased out in Singapore by the end of 2025 because of the abovementioned reasons coupled with the growing adoption of e-payments. Banks will then begin charging a fee to process cheques from 1 November 2023 onwards.

According to MAS,

“This shift away from cheques to digital payments will continue as more financial institutions and businesses offer secure and simple payment solutions to their customers through PayNow and eGIRO. By 2025, larger retail banks will also enable their customers to make deferred payments digitally.”

MAS is currently working with the banking industry to develop solutions for customers who are unable to adopt alternative payment methods.

The proposals for these solutions and the timeline for the termination of the cheque truncation system will be published in a consultation paper next year.

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